PE 7-4A Periodic inventory using FIFO, LIFO, average cost methods

The units of an item available for sale during the year were as follows:

Jan. 1 Inventory 12 units at $45 $ 540
July 7 Purchase 18 units at $50 900
Nov. 23 Purchase 15 units at $54 810
Available for sale 45 units $2,250

There are 11 units of the item in the physical inventory at December 31. The periodic
inventory system is used. Determine the inventory cost using (a) the first-in, first-out
(FIFO) method; (b) the last-in, first-out (LIFO) method; and (c) the average cost method.

Answer:
a. First-in, first-out (FIFO) method: $594 = 11 units × $54  
b. Last-in, first-out (LIFO) method: $495 = 11 units × $45  
c. Average cost method: $550 (11 units × $50), where average cost = $50 = $2,250/45 units

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